Cuomo Rakes In Donations From Energy Sector

Andrew Cuomo’s energy and power agenda, titled Power NY, is more than 23,000 words long, including footnotes, stretched out over 150 pages. But two words that never appear in the Democratic gubernatorial candidate’s document, together or separately, are “hydraulic” and “fracturing.”

And while the document does discuss natural gas drilling in other terms, the omission of hydraulic fracturing by name – hydrofracking for short – is notable. It is also understandable. The drilling technique and its potential use in the Marcellus shale buried under large parts of the state are an emotionally fraught issue, having pitted neighbor against neighbor upstate and drawn the ire of environmentalists, even as supporters say gas could help solve complex statewide power problems. The state’s next governor will preside over administrative decisions that could decide whether, how and where drilling is allowed to take place, and for Cuomo, the debate is particularly sensitive: Power companies with a stake in natural gas are among his campaign’s largest contributors.

Proponents say drilling into the shale, which often involves pumping water and chemicals into cracks in the rock deep underground, could yield enough natural gas to change New York’s power landscape profoundly, providing plentiful fuel for power plants across the state and the country while replacing coal, a dirtier resource, in rehabilitated older plants. Critics maintain it threatens to poison groundwater wherever it occurs, including in the vast watershed that supplies drinking water to New York City.

Where The Candidates StandCarl Paladino, the Republican candidate for governor – who did not respond to requests for comment – sides with proponents. His support for drilling in the shale treats the safety of hydrofracking as a foregone conclusion, and, his web site says, his support “means drilling the Marcellus Shale safely – and immediately – outside the New York City water table.

“We'll tap the easternmost part of the Marcellus Shale when drilling is green-lighted there, too,” the site adds. “And we'll get that done without undue delays.”

Just as concisely, candidates to Cuomo’s left – City Council member Charles Barron of the Freedom Party and the Green Party’s Howie Hawkins – favor an outright ban. Cuomo’s position is both more nuanced and less clear.

While he didn't respond to requests for comment either, in his campaign literature and statements Cuomo indicates that he is seeking to maintain a tenuous balance – to encourage expanded natural gas use, as he does in his power agenda, while ensuring that the gas is obtained in a way that does no harm to the environment.

“Because so much of our supply of energy is based on natural gas fuel, ensuring a supply of low-cost natural gas is important to New York,” his position paper maintains, adding that drilling could help the upstate economy and reduce the need for more environmentally destructive resources, like coal. Still, it adds, “New York State must ensure that, if and when the Shale’s natural gas is obtained, it does not come at the expense of human health or have adverse environmental impacts.”

The Hydrofracking DebateDrilling without human or environmental cost is not necessarily possible, said Craig Michaels, watershed program director at Riverkeeper, an environmental group that advocates strong restrictions on drilling.

“That, I think, is the big question on everyone’s mind,” Michaels said in an interview. “Is there a way to do this safely, and can we ensure that it’s safe in every instance? And I think the jury’s still out on that.”

Whether drilling is or is not allowed will depend, in part, on an ongoing review by the state’s Department of Environmental Conservation – but there are other potential hurdles to drilling, too, including proposed anti-hydrofracking legislation. One bill, already approved by the state Senate, would impose a moratorium on the practice until May. Richard Capozza, a Syracuse lawyer, has supported drilling, calling the DEC’s reluctance to approve hydrofracking so far a “morass,” colored by “public fears and misperceptions” about the safety of drilling.

“Will New York clear the political and regulatory hurdles to make the natural gas ‘gold rush’ a reality,” he asked, in a 2009 article for the Oil and Gas Financial Journal, “or will it remain on the sidelines while other states such as Pennsylvania reap the rewards?”

Capozza’s take on the issue is important because of his job: He is chairman of the energy and utilities practice area, and the partner in charge of political giving, at Hiscock & Barclay, a law firm that has given $55,900 to Cuomo’s campaign since 2008, according to public records. (The firm, records indicate, has not donated to Paladino, the candidate who most vocally shares Mr. Capozza’s concerns about competition from Pennsylvania, where drilling has had a relatively easy path through state government.) Capozza could not be reached for comment before press time.

The DonorsEnergy companies are weighing in with their support for Cuomo at a time when power-generation and transmission in the state are in flux. New York’s energy market was deregulated in 1996, and consumers now choose between dozens of companies to provide their electricity. With power use expected to escalate over the coming decades, particularly in crowded downstate areas, companies are vying to build new plants and power lines, and to develop new fuel sources – all endeavors that require state and local government approval.

At least $140,000 in donations from the energy sector (not including individuals, law firms and engineering firms) has poured into Cuomo's campaign since 2007, with none of his donors giving to Paladino, who is behind in the polls. Brookfield Asset Management, which operates hydroelectric and wind plants, donated $32,000 through various subsidiaries, and NRG Energy, operator of natural gas, coal and oil plants in New York, gave $10,000. (The company is also acquiring Green Mountain Energy, which sells wind and hydroelectric power at New York City farmers’ markets.)National Grid, the multinational energy company, donated $3,000 to Cuomo, and its subsidiary Keyspan, donated $1,000. An even larger Cuomo contribution came from Robert Catell, former chairman of National Grid’s American division, who is now chairman of the Advanced Energy Center Advisory Board at Stony Brook University.

In July, Catell wrote an opinion column for Newsday entitled, “Don’t reject hydraulic fracturing out of hand.” Since 2008, he has donated $15,000 to Cuomo’s campaign.

Cuomo's energy plan makes it clear that he likes wind and suggests that he opposes coal. He has also long said that he favors closing the Indian Point Energy Center, in Westchester County, when its license expires in 2013. Cuomo, who has called the plant’s proximity to New York City a catastrophe in waiting, has made no specific proposal to replace the power Indian Point generates. The New York Independent System Operator, which maintains the state’s electrical grid, warns that the plant is necessary in the short term to ensure reliable power during high-use periods.

In response to such concerns, Cuomo's plan emphasizes conservation, renewable power and grid improvements. The potential absence of Indian Point also represents an opportunity for the power companies donating to Cuomo to fill the void in the state’s energy supply.

Cuomo's IndependenceCuomo’s four years at attorney general offer precious few clues about his preferences on energy; during his term, he seemed to impartially investigate and prosecute energy companies that use a variety of fuel sources. In 2007, he investigated five power companies seeking to build coal plants in other states, questioning whether their investors had been fully advised of the financial costs that their emissions could create. Beginning in 2008, he began cracking down on conflicts of interest involving local officials and wind power companies. And in 2009 he charged that Fortuna, a natural gas drilling company, had misled upstate landowners into signing unfavorable leases. The company settled and agreed to pay $192,000 to the state.

It's also possible that he will operate independently of his donors. (Most of them – including Capozza’s law firm – are so large and diversified that it is impossible to know their exact reasons for supporting any candidate.) Still, companies that use natural gas have a clear interest in hydrofracking, which could provide their power plants with plentiful fuel, nearby, at a time when demand is high.

One such company, the electricity giant Competitive Power Ventures, has donated $75,000 to Cuomo’s campaign since 2009 through various subsidiaries. The company has proposed building a natural gas plant in Wawayanda, New York, and its portfolio includes both natural gas and wind-power generation facilities – two types of power plants that Cuomo endorses in his energy position paper. Another firm, Spectra Energy Corporation, which distributes natural gas, donated $1,000, plus $2,000 from a subsidiary, Texas Eastern Transmission.

In the end, whenever that may be, the final decision on hydrofracking may involve more than just the governor’s office. The new attorney general could also have a say if the DEC’s eventual policy decisions don’t satisfy everyone, Riverkeeper’s Michaels said.

If that happens, he said, “Then the state is likely to wind up in court.”

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